Boston, MA, USA
March 20, 2007
Web Services
and SOA in Insurance 2007: Realizing and Communicating the Business Value
Report Published by Celent
Large insurers have already realized
integration efficiencies ranging from 10% to 49% from their investments in
SOA.
Insurers are using Web services and
service-oriented architecture (Web services/SOA) to reduce integration
costs and make developing systems for new business, underwriting, and
claims more efficient and effective, according to a new report from Celent
that draws on survey data and interviews from more than 20 insurers.
“Web services and SOA are delivering real
business value today, even in places where initiatives are limited to less
than a dozen reusable services,” says Matthew
Josefowicz, managing director of the Insurance group at Celent and
primary author of the report. “Unfortunately, today’s hype, which
focuses on the potentially transformational capabilities of a true
process-driven architecture, is distracting attention from the short-term
value of these limited deployments.”
“The hype is unimportant. Web services/SOA
may be a ‘plumbing’ issue, but it’s no less important for that.
Deploying even a few reusable services can have an important impact on
extending insurers’ already stretched IT resources,” Josefowicz
continues. ”While purists may quibble about whether this constitutes SOA,
that discussion is beside the point.”
Celent’s report finds that the majority
of large insurers and a significant minority of midsize insurers use Web
services/SOA today to create business value across the entire
product/policyholder life cycle.As insurers look toward the next 18
months, they expect their Web services/SOA investments to have the
greatest impact in reducing their internal integration burden.
“The reduction of systems integration
burdens is a potential game-changer, in that it allows CIOs to reallocate
scarce resources to more strategic application development. By their own
internal measurements, many large insurers say that their investments in
Web services/SOA had already yielded savings on integration costs in
subsequent projects that ranged from 10% to 49%.
“Sadly, most insurers have not taken
formal steps to quantify the value of their initiatives, which leads to a
lack of appreciation from the business side,” notes Josefowicz. “We
believe that quantifying the value is a critical task for IT.”
The 30-page report offers a simplified
model to help IT groups get started quantifying the business value, as
well as over 15 charts and tables of survey data covering a wide range of
areas including:
- Current state of adoption
- Relative value of Web Services/SOA
across business areas
- Most valuable individual services
deployed, by business area
- Most common technology platforms used
Celent advises insurer IT groups to start
small with Web services/SOA, but start today, since even a few reusable
services yield real business results. Ensure that vendors support SOA-based
integration, and document investments and savings carefully to demonstrate
the value clearly to the business side.
A table of
contents is available online.
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